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Aggregate Demand and Aggregate Supply
Aggregate Demand and Aggregate Supply
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AP Macroeconomics Unit 3
Flashcards
25 cards
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Practice quiz
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Questions
25
Answers
1
When taxes decrease, consumption
decreases, so aggregate supply shifts left.
increases, so aggregate demand shifts right.
increases, so aggregate supply shifts right.
decreases, so aggregate demand shifts left.
2
Which of the following does not determine the long-run level of real GDP?
the price level
the supply of labor
available natural resources
available technology
3
At the end of WW2 many countries were rebuilding. The rebuilding increased AD in
neither the United States, nor Europe.
both the United States and Europe.
Europe, but not the United States.
the United States but not Europe.
4
Which of the following shifts aggregate supply to the right?
a decrease in the money supply
the repeal of an investment tax credit
a decrease in the price level
technology that increases the profitability of goods
5
Which of the following shifts aggregate demand to the right?
Net exports fall.
Congress reduces purchases of new weapons systems
The Fed buys bonds in the open market.
The price level falls.
6
Aggregate demand shifts left when the government
None of the above is correct.
cuts military expenditures.
Both of the above are correct.
decreases taxes.
7
When the government spends more, the initial effect is that
aggregate demand shifts right.
aggregate supply shifts right.
aggregate supply shifts left.
aggregate demand shifts left.
8
Aggregate demand would shift right if either
all of the above are correct
PL decreased, or government expenditures increased.
government expenditures or the money supply increased.
PL decreased, or the gov instituted a tax credit.
9
If the dollar appreciates because of speculation or government policy, then U.S. net exports
increase and aggregate demand shifts right.
decrease and aggregate demand shifts left.
increase and aggregate demand shifts left
decrease and aggregate demand shifts right.
10
All of the following can shift Aggregate Supply, except
supply shocks from trading partners
increased business taxes
an innovation in technology
changes in the price level
11
If countries that imported from the US went into recession, U.S. net exports would
rise, making aggregate demand shift right.
fall, making aggregate demand shift right.
rise, making aggregate demand shift left.
fall, making aggregate demand shift left.
12
Which of the following shifts aggregate demand to the right?
All of the above are correct.
an increase in the money supply
an increase in net exports at every exchange rate
an investment tax credit
13
If the dollar appreciates because of speculation or gov policy, or other countries = recession
AD shifts left in the US
AD is unchanged in the US
AS shifts left in the US
AD shifts right in the US
14
Which of the following shifts both short-run and long-run aggregate supply right?
None of the above is correct.
an increase in the capital stock
an increase in the expected price level
an increase in the actual price level
15
If people want to save more for retirement
or if the gov raises taxes, aggregate demand shifts right.
AD shifts right. If the gov raises taxes, AD shifts left.
or if the gov raises taxes, aggregate demand shifts left.
AD shifts left. If the gov raises taxes, AD shifts right.
16
An increase in which of the following shifts aggregate demand to the right?
government expenditures
consumption
All of the above are correct.
investment
17
An increase in EXPECTATIONS of the price level shifts short-run aggregate supply to the
left. Increasing the actual PL shifts SRAS to the left.
right. Increasing the actual PL shifts SRAS to the right.
right. Increasing the actual PL does not shift SRAS.
left. Increasing the actual PL does not shift SRAS.
18
Consumption would decrease and aggregate demand would shift
right if taxes increased
left if taxes increased.
left if taxes decreased.
right if taxes decreased.
19
The aggregate supply curve is upward sloping rather than vertical in
neither the short nor long run.
the short and long run.
the long run, but not the short run.
the short run, but not the long run.
20
Which of the following shifts aggregate demand to the left?
an increase in the price level
an investment tax credit
a decrease in the money supply
an increase in net exports
21
Which of the following shifts short-run, but not long-run aggregate supply right?
a decrease in the price level
a decrease in the capital stock
a decrease in the expected price level
an increase in the money supply.
22
The aggregate supply curve is vertical in
the short run, but not the long run.
neither the short nor long run.
the long run, but not the short run.
the short and long run.
23
Which of the following shifts aggregate demand to the left?
The price level falls.
Stock prices fall.
The dollar depreciates.
The price level rises.
24
Which of the following shifts short-run aggregate supply right?
an increase in the price of oil
an increase in the actual price level.
an increase in immigration from abroad
an increase in the minimum wage
25
Aggregate demand shifts right when the government
All of the above are correct.
repeals an investment tax credit.
increases the money supply.
lowers personal income taxes
